New Delhi: CBRE South Asia Pvt. Ltd, India’s leading Real Estate Consulting firm, announced the findings of its annual Global Prime Office Occupancy Costs survey. As per the survey’s findings, Delhi’s Connaught Place moved one notch up to be the ninth most expensive office location with an annual prime rent of USD 153.26 per sq. ft from last year’s 10th most expensive office location.
BKC Slips to 26th Position
Meanwhile, Mumbai’s Bandra Kurla Complex (BKC) moved down to the 26th position with an annual prime rent of USD 96.51 per sq. ft. The central business district (CBD) of Nariman Point stands at the 37th position resulting in an annual prime rent of USD 72.80 per sq. ft.
Global prime office occupancy costs—which reflect rent, plus local taxes and service charges for the highest-quality, “prime” office properties—rose 2.4 per cent year-over-year, with the Americas up 3.2 per cent, EMEA up 2 per cent and Asia Pacific up 1.7 per cent.
The survey highlights that for the first time in this cycle, prime office occupancy cost growth was consistent across all regions in the past 12 months. Global economic growth has stimulated robust leasing activity, particularly in EMEA and APAC regions and occupancy costs grew at a faster rate than last year. Also, Americas despite recording a mild slowdown period witnessed the overall fastest increase in annual costs at 3.2 per cent.
Anshuman Magazine, Chairman – India & South-East Asia, CBRE said, “Strong demand from finance, technology and the e-commerce sectors has fueled the growth momentum in prime occupancy costs from last year & Commercial office market remains a strong growth propeller for the real estate sector. Delhi, being a prime market, continues to witness significant activity and has moved one step ahead to the 9th position owing to stable vacancy, rents and absorption. We are optimistic about the Mumbai market and are expecting an upswing in the coming months”.
Hong Kong (Central) Tops the List
Globally, Hong Kong (Central) at USD 306.57 per sq. ft and London (West End) at USD 235.01 per sq. ft continued to lead the ranking propelled by banking and finance sectors. Flexible space operators were also found to be highly active in the Hong Kong market.
The market with the steepest rise, Durban experienced strong demand from business-process outsourcing companies. Overall, the APAC region witnessed a 1.7% increase in occupancy cost this year from around 1.2% in 2017.
Top 10 Most Expensive Markets as per Global Prime Office Occupancy Costs survey of CBRE
|Top 10 Most Expensive Markets
(In US$ per sq. ft. per annum)
|1||Hong Kong (Central), Hong Kong||306.57|
|2||London (West End), United Kingdom||235.01|
|3||Beijing (Finance Street), China||200.91|
|4||Hong Kong(Kowloon), Hong Kong||189.56|
|6||New York (Midtown- Manhattan)||183.78|
|7||New York- (Midtown-South Manhattan)||171.56|
|8||Tokyo (Marunouchi/Otemachi), Japan||171.49|
|9||New Delhi (Connaught Place-CBD), India||153.26|
|10||London (City), United Kingdom||144.95|